Trifluoroacetic anhydride-mediated tandem trifluoroacetylation/cyclization of cyanoacetanilides proceeded efficiently under mild conditions to give 4-hydroxy-3-trifluoroacetylquinolin-2(1H)-ones in good yields. Isolation and direct observation of the reaction intermediates revealed that alpha-trifluoroacetylation resulted in the shortening of C[triple bond]N bonds and that the electron density of CN groups was high. A plausible reaction mechanism based on the results is also described.